"However, with zero revenues since the forced closure of all of our shows due to COVID-19, management had to act decisively to protect the Company's future".
Canada's Cirque du Soleil Entertainment Group filed for bankruptcy protection on Monday as the COVID-19 pandemic forced the famed circus operator to cancel shows and lay off its artistes.
The Quebec government's investment and lending arm, Investissement Quebec, is providing $200 million of the $300 million to be invested by the TPG-led group, which proposes to acquire substantially all of the company's assets for a combination of cash, debt and equity.
Cirque shut down all of its shows back in March, furloughing 95% of its employees.
The cuts of 3,480 employees come from the over 4,600 individuals who were furloughed back in March, with multiple reports saying that Cirque du Soleil is almost $1 billion in debt.
It said it meant to rehire "a substantial majority" of terminated employees, business conditions allowing, once coronavirus-related shutdowns were lifted and operations could resume.
The company also entered a so-called stalking horse purchase agreement with its three stakeholders: TPG Capital, China-based Fosun, and the Canadian pension fund manager Caisse de dépôt et placement.
The company added that it expects to resume production of its shows in Las Vegas and Orlando before other shows, therefore, the artists and show staff of the resident shows division will not be affected.
The company says it will seek court protection from creditors under the Companies' Creditors Arrangement Act at a hearing Tuesday at Quebec Superior Court.
In exchange for debt restructuring, creditors will receive unsecured debt of US$50 million in addition to owning 45 per cent of the Cirque, which will decrease the current shareholders' stakes.
Cirque du Soleil shows in Austin, Texas, Chicago, Houston, New Orleans, Salt Lake City, Montreal, Boston, Tel Aviv, Meloneras, Spain, Munich, Costa Mesa, Denver, and the Australian cities of Melbourne, Adelaide and Perth have also cancelled.